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Ofcom consultation - Review of non-geo calls 2010 (Read 118,309 times)

Dave

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Re: Ofcom consultation - Review of non-geo calls
Reply #45 - Jun 2^nd, 2010 at 11:34pm

idb wrote on Jun 2^nd, 2010 at 10:23pm:

I will pose a question or two to those who support the continuance of CPP model. …

As I say, the amount that the calling party pays for premium/NTS (that is, the amount the caller's telco hands over to the receiver's telco) is by and large related to BT's retail call prices as opposed to the amount it costs the telco operating the receiver's number. I understand that the latter method is how the 0.5 pence per minute for landline calls is arrived at.

« Last Edit: Jun 3^rd, 2010 at 12:04am by Dave »

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SilentCallsVictim

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Re: Ofcom consultation - Review of non-geo calls
Reply #46 - Jun 3^rd, 2010 at 2:27am

idb wrote on Jun 2^nd, 2010 at 9:09pm:

I guess we must differ on the acceptability of revenue-sharing calls for a particular service.

Not necessarily.

We differ insofar as I do not believe that it is the responsibility of Ofcom itself to make a determination about what are the circumstances in which a caller can be invited to consider whether or not to make a particular call. The crucial issue is that where a premium charge is involved, the caller is made aware of the existence, and guided as to the amount, of the premium. That is Ofcom's responsibility. In my response to the consultation, I both lay out this principle and propose a regulatory mechanism that could be used to implement it in the market that currently exists.

The present regulatory structure is many years behind the times, in that it is based on the assumption that BT is the only provider of telephone services and that all of its charges are regulated. In that context neither 0845 nor 0870 were CPP services. The former provided both a discount to callers and a subsidy to users. This is of course now so far from the truth that it does indeed appear to be ridiculous. 0870 has been addressed, with failings that must be corrected, 0845 (in its present form) must now be ended also. Ofcom has been disgracefully tardy in getting to grips with this issue, however I believe it is now set to act.

I write at length about 0844/3, making the point that consumers who "require" the benefits which this facility offers, in general, have to make a case for its continuation as a feature of the National Numbering Plan. History suggests that a case has been accepted in the past, however I believe that it has to be argued strongly against the valid objections which exist and are themselves argued strongly. These objections are over and above the vital issue of cost transparency, which must be addressed anyway. (I urge those who press these objections to do so on the assumption that a fair degree of transparency has been achieved, so it cannot be said that this alone will remove their concerns.)

Moving further up the call cost scale, determination about the validity of a CPP service should rest with Phonepay Plus, which has the responsibility of
being the self-regulator of those who derive a living from CPP services. Maintaining the integrity of the industry represented by its membership, it has a proper right to exclude those who it believes are not truly offering a valuable service. Its capacity to perform this role has been undermined by adding in users of 0871/2/3 numbers to this membership. In general these are not organisations in the same market as any true PPP member, they are simply gaining a little subsidy from callers towards the costs of running their call centre operations. The self-regulatory model does not work for these cases, however no other is presently available under the terms of the Communications Act 2003.

0871/2/3 is now already in the PRS scheme, I have no alternative regulatory model to propose. I would be delighted to hear of other suggestions and how these could be put into effect. For the time being, I propose that the clearest possible means of advising potential callers of the cost of a call, in an open market for telephone services, be compelled by regulation, so that the issue can be addressed properly - between the seller and the buyer.

Ofcom's duty to consumers is not to run the market, by setting fair prices or determining what may be sold, but simply to ensure that it functions. We may not be happy with this role and wish to propose amendments to the Communications Act, however that is not something that Ofcom can do and so such discussion may be better kept separate from a thread focussed on an Ofcom consultation. I personally find myself kept very busy in trying to get Ofcom to comply with the provisions that already exist in the Act. Seeking to amend the largest item of legislation every passed by the UK parliament, and perhaps some of the competition legislation both local to the UK and derived from EU Directives may be a worthy aim, but it is a sizeable challenge.

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SilentCallsVictim

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Re: Ofcom consultation - Review of non-geo calls
Reply #47 - Jun 3^rd, 2010 at 2:48am

The preceding remarks were prepared before I lost internet access for a period, several replies back. Apologies if they are rendered irrelevant by subsequently posted contributions that address the same points in a different way.

Dave wrote on Jun 2^nd, 2010 at 11:10pm:

The suggestion that the cost of an inclusive package will have to increase is a valid one, but how is this a reason not to include calls? The calls will be made regardless and consumers will continue to be aggrieved at having to pay extra to phone their bank or insurance company.

A totally fair point. This is however a matter that could be fully addressed by the market. I see no reason for Ofcom to intervene, as this will always have the potential for creating all manner of unintended and undesirable consequences.

Arguments about what telcos might or should do to meet the needs of customers in a competitive market is very different from what Ofcom should compel by regulation. By suggesting that Ofcom should not intervene to force a particular effect, I am not arguing that the effect should not happen naturally. Where consumers have a choice of provider, perhaps it is a good thing that some offer widely inclusive packages, whereas others are more limited. The vital need is to remove the distorting NTS condition from BT and ensure that the greatest possible transparency in pricing is achieved.

A disappointing footnote for those who responded to the consultation hoping for Ofcom to introduce new regulations in the Autumn is found in an announcement from the Department for Business.

Quote:

Business Secretary Vince Cable said:

“The deluge of new regulations has been choking off enterprise for too long. We must move away from the view that the only way to solve problems is to regulate. ..."

I will continue to argue that the regulatory changes which I propose are supportive of enterprise, essential in the interests of a properly competitive market and simply a suitable and long-overdue replacement for legacy regulations that have been harming both business and the proper interests of consumers.

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idb

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Re: Ofcom consultation - Review of non-geo calls
Reply #48 - Jun 3^rd, 2010 at 12:16pm

Dave wrote on Jun 2^nd, 2010 at 11:20pm:

idb wrote on Jun 2^nd, 2010 at 9:09pm:

Why do we need to have this subsidy? Why did this subsidy gradually increase from zero to virtually every commercial and public sector body? Who decided that this subsidy was necessary? …

The subsidy has not gradually increased from zero. It is the revenue share payments made directly to number users which have increased as a natural result of competition, in the same manner as retail prices for calls have been driven down by competition. [...]

Poor choice of words on my part. What I meant was the use of this subsidy gradually increased from zero to a point where subsidy numbering is virtually an automatic choice. Thanks for the clear explanation of the current situation. I am trying to find out the equivalent payments for the system in place here.

As from November 21, 2013, I no longer participate in the forum and am unable to receive private messages.

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SilentCallsVictim

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Re: Ofcom consultation - Review of non-geo calls
Reply #49 - Jun 3^rd, 2010 at 1:06pm

idb wrote on Jun 2^nd, 2010 at 12:14am:

The response from IPV6 has a few discussion points

When responding to the limited quoted extracts from this contribution to the consultation, I may have been unfair to IPV6 Ltd, as reading the full consultation response does (sort of) answer my question.

Quote:

National Price Plan
We believe it is in the general interest of all parties and consumers if Ofcom were to consult on the forming of a National Price Plan, (drawing from the pricelists which are commonly known as ‘costs from a BT landline’) and introduce legislation which would prohibit any originating network or point from charging more than the National Price Plan for any call.

This is a familiar argument from those who benefit from the use of revenue sharing numbers. They argue that the cost should be carried by the originating telephone companies, rather than callers. There are indeed many who would support this view, arguing that telephone companies have lots of money and so they can be expected to readily drop some of their prices, without there being any adverse impact elsewhere.

Those who have progressed from a kindergarten understanding of business and economics will see the weakness in this basic argument and reject it. Those more advanced may attempt to resurrect it by arguing about the effect of competition. I would argue that whilst there may be such an effect, it does not guarantee that an enforced reduction of income in one area will not be made up in another.

There is certainly nothing that Ofcom can do to ensure that this does not happen. The regulated "costs from a BT landline" are set on the basis that BT does not make a proper margin on these calls. (Incidentally, this kills the economist's other argument about lower prices leading to higher volumes and potentially greater net income - because there is no net income at the prices referred to.) As BT continues to make an acceptable level of profit on its turnover, one must assume that this is being disproportionately obtained from its margins on other activities.

(As it has been determined that BT no longer holds SMP, Ofcom loses its capacity to look inside its books so as to be able to try and fix things in this way. It is highly unlikely that Ofcom would get away with reversing this determination and doing the same with all other providers. Oddly, Ofcom is trying to do the same with the mobile telcos in relation to the MTR, but I have my doubts about whether it will succeed as it intends; it may have to achieve the reductions by a slightly different route.)

Returning to IVP6. It is somewhat odd to see an argument for swinging price control preceding an impassioned claim that "the telecommunications industry has to be allowed to make a legitimate and healthy profit".

I am not sure if the author is characterising themselves as being amongst the "small (but vocal) minority" alleged to be failing to show "due regard for the telecommunications industry and the staff that work within". I suspect that, like many respondents, they are just a bit confused by these complex issues. It could be unfair to suggest that they are presenting themselves as representing "the telecommunications industry", despite the fact that they are attacking the interests of the originating providers, whom most of us would see as being part of that same industry. On the other hand, this could be exactly what they are doing.)

In effect, those who benefit from revenue sharing calls and argue for retail price controls are suggesting that their financial benefit be derived from telephone users in general, rather than those who call them. This to me is an outright admission that they cannot justify the benefit that they are receiving, and wish to see the cost diluted and thereby hidden. In the interests of transparency, as well as for the sake of the telecommunications industry being "able to employ people, compete, expand and continue investing in ‘the network’", this suggestion should be rejected.

I strongly beleieve that if receipients are to benefit from a subsidy then this must be openly reflected in the price that their callers pay. I see no justifiable basis for Ofcom compelling this to be funded in some other way.

« Last Edit: Jun 3^rd, 2010 at 1:29pm by SilentCallsVictim »

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NGMsGhost Supreme Member Offline The Forum Ghost of NonGeographicalMan<b r /> Posts: 2,720 Surrey, United Kingdom Gender:	Re: Ofcom consultation - Review of non-geo calls Reply #50 - Jun 3^rd, 2010 at 1:39pm I see that even on a sunny summer day that SCV does not seem to have more productive things to do with his time than enter in to his usual long and impenetrable discourses on this website.
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SilentCallsVictim Supreme Member Offline aka NHS.Patient, DH_fairtelecoms Posts: 2,494	Re: Ofcom consultation - Review of non-geo calls Reply #51 - Jun 3^rd, 2010 at 2:14pm I see that even on a sunny summer day that NGMsG does not seem to have more productive things to do with his time than offer helpful and profound responses to long and impenetrable discourses on this website.
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sherbert

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Re: Ofcom consultation - Review of non-geo calls
Reply #52 - Jun 3^rd, 2010 at 2:20pm

NGMsGhost wrote on Jun 3^rd, 2010 at 1:39pm:

I see that even on a sunny summer day that SCV does not seem to have more productive things to do with his time than enter in to his usual long and impenetrable discourses on this website. Tongue

Down in my neck of the woods, the NHS have found a very good way to save a huge amount of money. When you have an operation in our local hospitals they have now done away with the need of having an an anaesthetist. Before having an operation, they give you SCV's posts to read and they will always send you to sleep! Grin

« Last Edit: Jun 3^rd, 2010 at 2:21pm by sherbert »

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loddon

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Re: Ofcom consultation - Review of non-geo calls
Reply #53 - Jun 16^th, 2010 at 9:26am

Quote from SilentCallsVictim on Jun 13th, 2010, 3:41pm:
Quote:

I would not go so far as to say that the provisions it has put in place on pricing for calls to 0870 numbers amount to "encouragement of", "participation in" and "supervision of" a scam. I understand that no complaints about breaches of the relevant regulations have been received. I imagine that any member who had identified such a case would have drawn our attention to it in this forum.

I thought they had requested responses to a consultation. That they have not received specific complaints does not mean that there is no problem. Surely it is their job as regulator to monitor what is going on. If they took any notice at all of petitions on the Prime Minister's website, articles and comments in the press and media, comments in Parliament about 08 numbers being a "rip-off", the very existence of this website as well as much of the discussion in this Forum they would realise that there is a big problem with 08 Rip-off numbers and action needs to be taken.

Quote:
Quote:

Because the present situation makes use of a 0870 number pointless (with both users and callers paying more), one must assume that over time they will disappear. Announcing that they will be changed to be the same as 03 would give them a new lease of life, including through the period before such a revised regulation came into effect.

I agree that 0870 numbers are now pointless except for those phone companies that choose to profiteer shamelessly while they still exist -- so Ofcom should do something about a scam on the public.

Quote:
Quote:

I take serious issue with those (notably idb) who suggest that it should be for Ofcom or Phonepay Plus to determine what type of call may be subject to a relatively modest surcharge to the benefit of the recipient. Expecting Ofcom to assess every case to see if there is an "added value element" and if the charge incurred by callers is proportionate and proper, might be easy for NHS providers (for whom no charge can be proper) and a few other cases, but would be a nightmare in many others. I do not believe that Ofcom would be able to reject all such applications, as some may suggest it would. I am not even sure where it could find the statutory basis for the exercise of any such regulation.

I think that idb may be referring to dial-up internet access as possibly a valid "added value service" and I accept that maybe some provision should be made for such, but I don't pretend to know what. Some sort of pre-call price announcement could be one of the measures required. Surely Ofcom would not have to "assess every case"? Instead it could just define those added value services which are justified and rule out all others. My point is that most of these numbers are used in a way which does not add value for the caller. All the benefit accrues to the user company and therefore it is they who should pay for it as they do with 03 numbers.

Quote:

Ofcom has a duty to all consumers of telephone service, and that includes users of 084/087 numbers. If they can make a case for continuation of this benefit, then I cannot see how Ofcom can deny it, unless it can be shown to be "unfair" in terms that would survive legal challenge. The fundamental issue at present is the lack of transparency of the surcharge incurred by callers. If Ofcom were able to address that, as I propose that it could, then the situation should be able to right itself.

Provision of transparency would not resolve the fundamental issues with these rip-off numbers, the opportunity for scams, the incentivisation towards inefficiency and the fact that the callers are being forced to pay for a service which they are not receiving. The whole concept is fundamentally flawed and deceitful. Most ordinary people don't know why these numbers are so expensive, do not know that they are paying money over to the receiving company and are given no choice in the matter. Why do you think this website is so popular?

Quote:

I do not believe that 0871/2/3 should have been classed as PRS under the present regulatory regime. After all the work that was done to achieve this, however, I cannot see how Ofcom could be expected to change its mind, reverse the situation and take a step in a different direction. I regret the fact that some would therefore see whatever measures it does take as being insignificant in the context of what will be determined to be a "COMPLETE FAILURE".

Ofcom will be a "COMPLETE FAILURE" if it fails to take action to prevent the phone service industry from continuing to rip-off the public. They are having a review so now is their opportunity to put right a long standing wrong and a continuing scam of the British public.

Quote:

In the present political climate, we can have little hope for additional sweeping regulatory burdens being imposed on any industry. I believe that we should focus on openness and transparency, as I see this as an achievable objective that would resolve many of our concerns. In particular, I believe that it would nail the issue of NHS providers (GPs, Hospitals ) using revenue sharing 084 numbers, without having to draw Ofcom into a position of partiality between one group of telephone service users and another.

I am all for openness and transparency and I am not suggesting increased regulatory burdens. I just want Ofcom to put right a serious wrong.

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loddon

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Re: Ofcom consultation - Review of non-geo calls
Reply #54 - Jun 16^th, 2010 at 9:34am

This post and the previous one are copied from another thread where some of us veered slightly off topic so I have copied my points over here to where they belong. I expect that the debate about Ofcom's Consultation will continue for some time!

Quote from Dave on Jun 13th, 2010, 4:33pm:
Quote:

Quote from idb on Jun 12th, 2010, 3:16am: Quote:

..... my own position is that, generally, the cost of handling everyday general-purpose telephone calls (banks, transportation, utilities etc) should fall on the recipient and not on the originator unless there is some significant added-value element.

Quote from loddon on Jun 13th, 2010, 8:23am:
Quote:

Hear Hear idb. This is absolutely my position and what I submitted to Ofcom for their recent consultation "Review of Non-Geographic Calls Services". See my posting #5 here http://www.saynoto0870.com/cgi-bin/forum/YaBB.cgi?num=1272746772/0
I totally agree with this quote and the quote within it.

The fact that the likes of Virgin Mobile has increased the cost of calling 0870 numbers when last August it could have reduced them without loosing out seems to me to be a symptom of the market in that there is no natural competitive forces to achieve this. Likewise, most of the fixed line providers that chose not to pass on savings to callers.

As I said previously, there are consumers at both ends of the chain (i.e. callers and receivers are both consumers) and the regulator must act in the interests of both.

On the basis of where we are now, I cannot see how the regulator can be deemed a "complete failure" if it doesn't rule that 0843/4/5 and 0871/2/3 numbers be charged inline with 03 numbers. It must consider the interests of the consumers of those telephone numbers (banks, insurance companies etc) who will loose subsidy of their services or face the cost of migrating to other numbers.

What's more, these numbers have been in existance for over 10 years now and were born by Ofcom's predecessor, Oftel.

The current regulation is known as the NTS Condition and I explained how this came about earlier this month, although I didn't mention it by name. Basically, the said regulation was introduced in 2003 as BT had been found to be a dominent originating provider.

Essentially, it gave the advantage to receiving telcos (and their customers) at the expense of callers (those not with BT). Perhaps the regulator at the time had no other option but to do this. However, I say that it was then (or prior to it) that it started to go wrong and why we are where we are.

Thanks Dave for your explanations and your support, at least in part, of my position that it is the receivers of the benefits of NTS Services who should pay for them and not the callers.

Your point about Virgin Mobile supports my case for the need for Ofcom action. I am a customer of Virgin Mobile and I would not know about this price increase if it were not for the good people of this website bringing it to our attention. Virgin haven't notified me! Clearly there is a lack of competition to hold down prices so Ofcom need to take action.

I agree that the regulator must act in the interests of both callers and receivers. I feel that under the present regime callers are not being protected from scams.

"Banks, insurance companies etc" are part of the problem and are being allowed to rip-off callers by taking money from them for which there is no legitimate basis as far as I can see. Where in any phone service contracts does it say that a caller must pay part of the cost of a call over to the call receiver? What choice does the caller have to avoid such a charge or to negotiate the cost in order to get a better service for himself? 08 numbers are a rip-off in concept and should be brought into the same charging mechanism and rules as 03 numbers.

Having been in existence for 10 years a rectification of the current scandal is long overdue. The length of time over which a rip-off has been allowed and encouraged is no justification for allowing it to continue.

Your links to the regulations are interesting but I find it difficult to understand what is written. However, I found no reference to revenue sharing and how it is regulated. It is not the job of ordinary phone service users such as me to read and understand all the regs and machinations of the internal workings of the industry. That is why we have Ofcom who are supposed to be acting to protect us!!

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loddon

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Re: Ofcom consultation - Review of non-geo calls
Reply #55 - Jun 16^th, 2010 at 12:07pm

All the responses to the Ofcom Consultation on non-geographic calls services have now been published on the Ofcom Consultations website here :---

http://www.ofcom.org.uk/consult/condocs/ngnservices/responses/

Surprisingly there are only 42 responses in total. The major phone services suppliers such as BT, Cable & Wireless, BSkyB, O2, Orange, T-Mobile, Talk-Talk and Vodaphone have responded. Disappointingly, it appears only two of the regular contributors to this Forum have responded, particularly as the BT Response mentions the "high profile saynoto0870 campaign" as being influential.

I recommend that members read as many of these responses as they can and comment and draw attention to important points by posting in this Forum where we may debate them with a view to submitting our views to Ofcom on some future date. We have a significant influence on the non-geographic industry, as the industry and Ofcom itself admit, so let us try and use our influence on this and the following reviews now that we have a unique opportunity.

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SilentCallsVictim

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Re: Ofcom consultation - Review of non-geo calls
Reply #56 - Jun 16^th, 2010 at 5:57pm

This article is on a particular issue covered elsewhere in the forum: Ofcom sides with mobile operators on 0845 - The Register 14 June 2010

Some of the observations and many published comments (not mentioning any names Wink

) pick up on the points that are highly relevant to this thread.

One comment aims to draw the two issues together. (OK, some of us do work under many names, including in places where a particular alias may sometimes appear unusual and therefore have to be temporarily set aside.)

For those tempted to review one of the larger consultation responses, I repeat my tips and recommend use of the link offered in the posting quoted below. (The document is easier to jump through and read with an index in the margin. This technical feature was lost on re-publication.)

SilentCallsVictim wrote on Jun 2^nd, 2010 at 5:13am:

My contribution to the consultation is now published here. There is a page of "Highlights", which I commend to forum guests and members. This is an extract of some strong and quotable elements, supported by links so that they may be seen in proper context. It is intended to provide ready access to the meatier elements of what I am saying in a lengthy structured document.

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loddon

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Re: Ofcom consultation - Review of non-geo calls
Reply #57 - Jun 17^th, 2010 at 1:43pm

One of the submissions to Ofcom is by Powwownow, a Conference Call Service provider.
http://www.ofcom.org.uk/consult/condocs/ngnservices/responses/via-vox-powwownow....

They appear to offer a genuine added-value service making use of 0844 numbers and it seems to me that if ever there is a sensible and legitimate use for 0844 and it's charging mechanisms then this is it. Whilst I am resolutely opposed to the exploitative use of 0844 and other 084/7 numbers by Banks, Insurance, Retail etc companies and Government Departments I can see the benefits of the type of service provided by Powwownow.

My conclusion from this is that Ofcom need to work out some way of allowing legitimate added-value services such as this to continue to operate and for other valid services to be innovated and added whilst at the same time prohibiting the disgraceful exploitation of the 0844 range by the vast majority of the companies and organisations that are ripping us off.

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loddon

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Re: Ofcom consultation - Review of non-geo calls
Reply #58 - Jun 17^th, 2010 at 1:53pm

Following on from my previous post it is interesting to see what Powwownow have to say about the way the industry is confusing and mistreating the consumer:

http://www.ofcom.org.uk/consult/condocs/ngnservices/responses/via-vox-powwownow....

I have selected just a few of Powwownow's comments which illustrate just what a mess this industry is in and substantiate our long held feelings that the industry is malevolent, greedy, profiteering and deceitful and is desperately in need of proper regulation.

Quote:

Extracts from Powwownow submission to Ofcom
Powwownow is a conference calling brand running a large conference call service in the UK.

The market is damaged by the freedom for originating networks to set their own price for a call to special services numbers. The range of these prices is so great that consumers are uncertain how much a call to a special services number will cost.

Special services numbers are infrequently called (compared with normal Landline and Mobile numbers); therefore do not make up the buying decision for telephone packages. As they are not part of the buying decision market forces are not driving prices down – indeed network operators are using the uncertainly of the pricing to create excessive charging plans for their customers.

As the market is not working Ofcom should extend the scope of the regulation framework for these numbers to set a retail price.

"How much do 0843/4 calls cost? Calls are typically charged between 1p and 12p per minute for landline customers. Calls from mobile phones are typically charged between 20p and £1.50 per minute, depending on the provider and the number called"...Ofcom.

There is a lack of certainty over the cost of a call. With a percentage difference between providers of nearly 2,000%, consumers are confused.

The disincentives are related to deliberate confusion from mobile network providers in communicating the cost of the service.

For 0844 numbers we believe that the retail price of the call is very difficult to determine for a consumer.

While it is the case that these numbers are more expensive to provide that standard landline calls (as there is an outpayment to make) there is no justification for the mark-up that is being made over the cost of a standard outbound call.
If BT can make an acceptable return on 0844 calls other operators should be able to offer the same service on the same terms.

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Dave

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Re: Ofcom consultation - Review of non-geo calls
Reply #59 - Jun 17^th, 2010 at 4:09pm

Powwownow is essentially calling for the regulations that apply to BT to be extended to all other originating communication providers for their "special" numbers. What it wants is for the retention by OCPs on these calls to be kept to a bare minimum to pay for the service.

This principle is fundamentally flawed as OCPs will simply pass back to their customers (callers) the charges they incur in connecting calls by increasing line rental charges and the cost of other types of call etc. Such a move would also make "special" service numbers more attractive as they will then be cheaper to call from non-BT OCPs.

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